Many of you may have followed last year’s case in the High Court between HMRC and Prudential regarding the disclosure of advice provided by PwC. The Pru argued that the advice it had received was subject to legal professional privilege and therefore shouldn’t be disclosed. HMRC disagreed, a view that the High Court supported in ruling against the Pru.
The case has now gone to the Court of Appeal where it has been heard over the last two days. It has taken on an even higher profile in seeking to determine whether there should be a change to the boundaries of legal professional privilege when it comes to advising on tax law and whether such privilege should continue to be restricted solely to the clients of solicitors. The Law Society was given leave to intervene in the case on behalf of the legal profession and sought to maintain the status quo.
We believe the eventual outcome of this case could have significant implications for ICAEW members and qualified tax practitioners. This is why we sought and were also granted permission to intervene and to put the arguments as to why it is in the public interest that there should be a level playing field when it comes to the provision of advice on tax law.
Our view is that the existing rules limiting legal professional privilege to the clients of solicitors could prevent businesses and consumers from obtaining relevant advice from a suitably qualified professional such as a chartered accountant who has the knowledge and expertise appropriate to the situation they face.
When it comes to providing legal advice on tax issues, there should be equivalence in the eyes of the law irrespective of whether the advice is provided by a chartered accountant or by a solicitor. Chartered accountants pass rigorous exams and gain valuable experience through their employment during a three year training contract. Once qualified, they have to complete a number of hours of continuous professional development each year to ensure their technical knowledge is up-to-date. They are also subject to regular monitoring to ensure the services they offer meet the highest professional standards.
Our ultimate goal is that in a world where professionals from different disciplines – accountancy and law – are each working for the benefit of their clients, then where it is applicable, legal professional privilege should apply to the clients of both professions. The Court of Appeal hearing is the first stage in helping us achieve that!